3SOF

QuoteAs far as the GOOG puts go, a couple things - first of all, I know this is your fast portfolio, and as such you will put 1/3 of your money into each trade.  the problem with the $80 GOOG Jun 510 puts is that they cost $8000 per contract!! (i.e. $80*100) for some, certainly for me that is way too much to put into a single highly volatile instrument.  GOOG is fairly unique in that it is such a high priced strock that any options will tend to be expensive, even "at the money" options.  Maybe something a little closer in timeframe, i.e. April puts, and closer in strike, e.g. the April 450 puts are currently $23 per contract.  still expensive, but presumably you only want to hold these for a short period of time, so the time premium will not decay too significantly.

Yep, We didn't buy those puts for the 3 Stocks on Fire Portfolio. Since I don't know much about options, I asked Ramsburg for him to choose the right puts, he told me just bought those on the MSN, but he was wrong, there wasn't any liquidity.

He's looking for other puts now, and he told me he's not going to buy 33%, just 10% or so, because he thinks the risk is too high (me too).

He'll post which puts he bought here soon, I delegated the process to him ...

QuoteFinally, GOOG is currently struggling with 440, which was right on yesterday's (and the recent move) low.  I also see a potential intraday falling wedge with its base at 440 as well.  I would be concerned about a short term rally here, and would only look to buy those puts on a clear break of 440 (i.e. 1-3 5 min bars).  Just my thoughts....

Yep, I see that support too but I believe it will break it by the end of the session and a big sell off will occur.

Thanks

that was a typo, I meant if it is still a good time to short SIGM?

Quote from: gix330 on March 02, 2007, 01:27:36 PM
that was a typo, I meant if it is still a good time to short SIGM?

Yes, but probably not the best thing outthere ... look for bearish momentum. I already covered that trade.

To me shorting Google (buy puts) is the right thing to do today (but pay attention to risk).

So how to buy those puts?  I never have, and on my options chain on Etrade, I see something called GOP OL that looks like there is a bid at 22.2 and ask 22.6...  man, I am a newbie for options, how to even buy this, the order types are:

buy to open, sell to open, buy to close, sell to close

so I assume its sell to open since this is a put?

Quote from: tokyopua on March 02, 2007, 01:33:15 PM
So how to buy those puts?  I never have, and on my options chain on Etrade, I see something called GOP OL that looks like there is a bid at 22.2 and ask 22.6...  man, I am a newbie for options, how to even buy this, the order types are:

buy to open, sell to open, buy to close, sell to close

so I assume its sell to open since this is a put?

²

I absolutely know nothing about options ... 
Can someone briefly explain how it works? Gains, losses?

Hi Tokyo -

You want to Buy to Open GOPOL.

You are buying the right to the put - or the option of selling the stock at a fixed price.  Here we want the stock to go down, so that the put will go up (it will cost more for the right to sell it at that fixed price).

Quote from: BigSully1 on March 02, 2007, 01:13:48 PM
David, my brother keeps trying to get me to buy puts on GT. Your opinion? He's already called 3 times today on it.

I'm sorry BigSully1, but my opinion is you shouldn't short that stock, that is like buying a falling knife in a Bull Market. You need to sell weakness, not strength.

Good luck.

Quote from: dnickers on March 02, 2007, 01:35:34 PM
Hi Tokyo -

You want to Buy to Open GOPOL.

Thanks!  Now that I know how to buy, I need to figure out how much to buy!

I dont know what a good amount to buy is given also that David is putting in less than normal here... maybe will sit it out for awhile...

Quote from: David Randolph on March 02, 2007, 01:04:40 PM
Yep, I told Ramsburg to make the transaction for me, he told me he bought those puts, but after all he couldn't do it ... we're looking for other more liquid puts.

Sorry for the mistake 

We bought GOOG Mar 460 Put @ $22, but only 10% instead of the regular 33% per trade due to these options being more near the money (bigger leverage and risk).

Yahoo ticker: GOPOL.X
Ameritrade Ticker: +GOPOL

regards

Quote from: tokyopua on March 02, 2007, 01:39:12 PM

Quote from: dnickers on March 02, 2007, 01:35:34 PM
Hi Tokyo -

You want to Buy to Open GOPOL.

Thanks!  Now that I know how to buy, I need to figure out how much to buy!

I dont know what a good amount to buy is given also that David is putting in less than normal here... maybe will sit it out for awhile...

One contract will cost you 21.XX or whatever X 100 = $21XX.00.  Just buy one or two 

$VIX is really getting in gear here... fear is in the air again, nobody wants to be long into the weekend...

Options can be a little tricky - you will almost always be in the red at first due to the bid/ask spread.  However, they can be very rewarding.  With options I believe it's best to set some stops (sell to close) at your pain threshold because they can move very fast.

Quote from: gix330 on March 02, 2007, 01:44:16 PM

Quote from: tokyopua on March 02, 2007, 01:33:15 PM
So how to buy those puts?  I never have, and on my options chain on Etrade, I see something called GOP OL that looks like there is a bid at 22.2 and ask 22.6...  man, I am a newbie for options, how to even buy this, the order types are:

buy to open, sell to open, buy to close, sell to close

so I assume its sell to open since this is a put?

well...i only know how short selling works, and I think you have Sell Short option to Short the stock David picked, then BUY COVER it!?

am i right? I use scottrade, and i did not see the Buy to Open option at the trade section!

You usually have to be in a special option trading dialog box...at least that's how it is on ameritrade...but definitely "buy to open" purchases the option...a put is an insurance policy if you're holding the stock...or in effect a short if you are not long the underlying position.

Quote from: tokyopua on March 02, 2007, 01:33:15 PM
So how to buy those puts?  I never have, and on my options chain on Etrade, I see something called GOP OL that looks like there is a bid at 22.2 and ask 22.6...  man, I am a newbie for options, how to even buy this, the order types are:

buy to open, sell to open, buy to close, sell to close

so I assume its sell to open since this is a put?

If you think the stock will go down, you buy to open the puts. You could also sell to open the calls (less risky - you just get the premium). Buy to close is the same as "buy to cover" when you sold to open

I also don't know much about the practice, but know the theory. My game has always been the futures ... much more simple.

I just hope GOOG breaks that ascending trendline today, I draw it precisely since the IPO.